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BP to focus more on gas and oil production

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Reuters reports that three sources have told it that BP is due to unveil a new strategy, whereby it will pivot back towards its traditional gas and oil business.

The company previously announced in 2020 under then-CEO Bernard Looney that it would reduce its gas and oil production by 40% by the end of this decade. Since then, however, the invasion of Ukraine exposed vulnerabilities in the energy markets and sent gas and oil prices soaring, causing many oil majors to reconsider the pace of their shift towards renewables.

BP, which also makes the Castrol metalworking range, has already lowered its target to a 25% reduction by the end of this decade, although its long-term commitment of becoming a net-zero energy company by 2050 remains.

A spokesperson at BP said to Reuters:

“As Murray said at the start of year…the direction is the same—but we are going to deliver as a simpler, more focused and higher value company.”

Murray Auchincloss, the company’s former chief finance officer, took over as boss of BP at the start of this year. The company’s share price has underperformed compared to its rivals, as investors doubted the likely profitability under the current strategy.

Auchincloss therefore pledged to focus on BP’s more profitable businesses, most notably gas and oil. Reuter’s sources say that he will officially announce the new strategy at an investor day early next year, adding that the production target has already been scrapped in practice.

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